This paper deals with two aspects, firstly the Front Running in Indian context and secondly, an analysis of Insider Trading with respect to the Section 195 of Indian Companies Act, 2013 and the new Security Exchange Board of India (SEBI) Regulation in Prohibition of Insider Trading 2015; and also deals with the new term „proposed to be listed‟ as mentioned in the SEBI Regulation on Prohibition of Insider Trading 2015. Insider trading and Front Running are both confused terms and are often confused and mixed with each other. In the eyes of law, both are at divided terms. Both insider trading and front running are criminal offences though, the latter may not be a criminal offence at certain times, which depends upon the situations prevailing at that time and the laws of the country. Front Running is an investment game or a strategy based on the move of the clients wants to buy a certain stock of the company. It anticipates the impact of the upcoming value of trades. In India, SEBI through its regulations has made the act of trading using the stock information of their own clients in the share market illegal. Whereas, Insider Trading is a concept where a person who is well versed with the company, uses his position to secretly make profits from the knowhow and the knowledge. This will affect the markets and will induce unfair advantage to the insider who used the information of the company. There is also a conflict between the SEBI Regulations on Prohibition of Insider 2015 and the Section 195 of the Companies Act, 2013. The SEBI Regulations 2015, has liberalised the penal system with respect to penalising the Insider whereas the Companies Act, 2013 uses a narrow approach for the same. An ambiguity also exists when it comes to application of this regulation on ‘proposed to be listed companies.’
